BioAmber reports steady progress at Sarnia plant

By Erin Voegele | May 03, 2016

BioAmber Inc. has released first quarter financial results, reporting steady process in ramping up its Sarnia, Ontario, biosuccinic acid plant. Sales reached $1.5 million during the quarter, up 297 percent when compared to the same quarter of last year and up 31 percent compared to the fourth quarter of last year.

“We are making steady progress in ramping up Sarnia, from both a production and a sales perspective.  Our transition to an operating company is complete and we are focused on reaching full production capacity and selling the output of the plant,” said Jean-Francois Huc, CEO of BioAmber.  “As we ramp up, the macro environment in which we operate is beginning to improve and higher oil prices could lead to greater demand for biobased products in the second half of the year.”

During an investor call, Huc noted the company’s biotechnology continues to deliver excellent performance. “The fermentation of our yeast is consistently achieving target performance in terms of productivity, final concentration and yield on sugar,” he said. “We see the same performance in each of these three large fermenters and we have seen a steady decrease in the batch-to-batch variability of these metrics. Over the past two months, productivity, final concentration and yield on sugar have had less than 4 percent batch-to-batch variance relative to our targets.”

According to Huc, the company also made good progress in terms of plant up-time and the volume of off-spec product produced. During the first five weeks of the quarter, off-spec product averaged 18 percent of total production, with four of those weeks averaging under 10 percent. It increased during a production problem in February that lasted approximately five weeks, but recovered to under 20 percent during the following six weeks, with five of those six weeks at under 10 percent.

He also noted plant up-time reached 57 percent during the first five weeks of the quarter, dropped to 45 percent during the next five weeks while the facility experienced a production problem, and then increased to 67 percent during the following six weeks. Moving forward, BioAmber plans to increase plant up-time to 80 percent, Huc continued.

During the quarter, BioAmber raised $11.9 million in net proceeds from a public equity offering. Mitsui & Co. also invested $CAD25 million in the Sarnia joint venture in exchange for a 10 percent equity interest, increasing its ownership interest to 40 percent. Regarding product pricing, BioAmber reported the average selling price for biosuccinic was unchanged when compared to the fourth quarter of last year, despite lower oil prices.

First quarter revenues were $1.5 million, up 297 percent when compared to the same period of last year and up 31 percent compared to the fourth quarter. Gross loss for the quarter was $1.6 million, compared to a gross profit of $57,000 for first quarter of 2015. Research and development expenses decreased to $1.8 million, compared to $4.6 million during the first quarter of last year. Sales and marketing expenses were unchanged at $1.2 million. German and administrative expenses were also unchanged at $2.6 million. Depreciation of property and equipment and amortization of intangible asset expense increased to $1.2 million for the quarter, compared to $72,000 for the same period last year. The company incurred a net financial charge of $3.4 million for the quarter, compared to $571,000 during the same period last year. The company recorded a net loss attributable to BioAmber shareholders of $10.9 million, or 39 cents per share, for the first quarter, compared to a net loss of $8.4 million or 38 cents per share, during the same period of last year.